Feb. 8, 2018 —
The DoD OIG newsletter summarizes the reports and investigations released by the Department of Defense Office of Inspector General in the previous month and those we anticipate releasing in the coming month. I encourage you to read these reports and to access our website, which lists reports and investigations by year, subject, and DoD component. You'll also find our project announcements and additional news releases highlighting investigations conducted by the Defense Criminal Investigative Service. Thank you for subscribing to our newsletter.
Significant reports expected to be issued within the next 30 days include:
Defense Commissary Agency’s Purchases of Fresh Produce for Japan and South Korea
This audit determines the impact of the Defense Commissary Agency's decision to eliminate funding for transportation of fresh produce to DoD commissaries in Japan and South Korea.
The DoD’s Response to the Quality of Care Elements in the 2014 Military Health System Review
This evaluation determines whether the DoD adequately responded to the quality of care elements in the DoD’s 2014 Military Health System (MHS) Review and whether the DoD has improved the quality of patient care in the 33 DoD health care facilities Identified in the report, as directed by the Secretary of Defense. This evaluation also determines whether the MHS has plans to resolve all recommendations in the quality of care section of the MHS Review.
The Army’s Tactical Explosive Detection Dog Disposition Process from 2011 to 2014
This evaluation determines whether the Department of the Army complied with appropriate criteria for the disposition of Tactical Explosive Detection Dogs (TEDD) from 2011 through 2014, and whether the Secretary of the Air Force, as the Executive Agent for the DoD Military Working Dog Program, provided the required management and policy oversight of the TEDD disposition plan.
Evaluation of the Pentagon Force Protection Agency
This evaluation determines whether the Pentagon Force Protection Agency’s (PFPA) law enforcement programs complied with DoD and PFPA policies for when conducting criminal and administrative cases, and in its weapons and evidence management.
Audit of the U.S. Army Budget Process for Civilian Pay
This audit determines whether the Army adequately supported and justified the civilian Full-Time Equivalents and pay requirements contained in the Army’s FY 2017 budget estimate submission. FTEs are the number of working hours that represent one work year for one employee working full-time.
Recently issued Reports of Interest (to view report, if available, please click on title)
Summary Report of DoD Compliance With the Berry Amendment and Buy American Act
The report summarized that the Military Services and Defense Logistics Agency contracting personnel did not comply with the Berry Amendment for 40 contracts, valued at $211.6 million, and did not comply with the Buy American Act for 41 contracts, valued at $2.6 million. As a result, DoD contracting personnel had limited assurance that items purchased on contracts complied with the Berry Amendment and Buy American Act; did not notify the public of the lack of domestically-produced products; and committed potential Anti-deficiency Act violations by using appropriated funds to procure items not grown, reprocessed, reused, or reproduced in the United States and by using appropriated funds to procure foreign-made items.
Navy’s Single-Award Indefinite-Delivery Indefinite‑Quantity Contracts
This audit determined that U.S. Navy contracting personnel properly justified the Navy’s single-award, indefinite-delivery indefinite-quantity (IDIQ) contracts, for supplies and services. However, we found that Navy officials did not prepare or report the authorized approval of the decisions and supporting facts for all of the audited contracts in accordance with requirements; detail the circumstances, facts, and reasoning essential to use a single-award IDIQ contract; and, for one audited contract, valued at $192.7 million, did not notify Congress of conclusions and supporting facts that cited the public interest exception, as required. As a result, Congress and DoD officials may not have all the available information they need to make informed decisions on single-award IDIQ contracts, and there is an increased likelihood that improper single-award IDIQ contracts are approved.
Defense Threat Reduction Agency Cooperative Threat Reduction Contract in the U.S. Pacific Command Area of Responsibility
This audit determined that the Defense Threat Reduction Agency (DTRA) adequately monitored contractor performance and conducted sufficient invoice reviews for a task order for the construction of two regional National Coast Watch Stations, three substations, and a Joint Maritime Law Enforcement Training Center to support the Philippines Maritime Proliferation Prevention Project. The task order also provided weapons of mass destruction detection equipment and training for the Philippine National Police-Maritime Group, the Philippine Coast Guard, and the Philippine Bureau of Customs. However, DTRA did not prepare a quality surveillance plan to document the work requiring surveillance, the method of surveillance, or the process used to review invoices, as required by the Federal Acquisition Regulation Supplement. As a result, DTRA cannot ensure that consistent, long-term quality assurance methods are in place to validate that contractor performance meets the standards of the contract.
Navy and Marine Corps Management of Relocatable Buildings
This audit determined that Navy and Marine Corps Department of Public Works (DPW) personnel incorrectly classified 114 facilities as relocatable buildings, which hinders DoD and Department of the Navy personnel from accurately assessing space utilization. Navy and Marine Corps DPW personnel also potentially misspent $1.8 million to lease 32 relocatable buildings and an additional $750,000 to purchase 31 relocatable buildings after the leases had expired. As a result, these facilities potentially circumvents the military construction process by using short-term requirements for long-term needs.
Interagency Coordination Group of Inspectors General for Guam Realignment Annual Report
This statutorily required annual report provided a detailed statement of obligations, expenditures, and revenues associated with military construction on Guam.
DEFENSE CRIMINAL INVESTIGATIVE SERVICE HIGHLIGHTS (to view release, if available, please click on title)
Broward County Pharmacy Agreed to Pay the United States $350,000 to Settle Allegations that it Submitted Fraudulent Claims to TRICARE
On January 10, 2018, Healthy Meds Pharmacy Corp., a pharmacy located in Hallandale, Florida, agreed to pay the United States $350,000, to settle allegations under the False Claims Act for filling prescriptions in violation of TRICARE’s policy on telemedicine. From February through May 2015, Healthy Meds allegedly engaged in unsolicited calls to TRICARE beneficiaries, provided medically unnecessary compound medications to beneficiaries, and knowingly filled prescriptions from doctors who did not meet or properly consult with TRICARE beneficiaries.
Pharmacy Owner, Medical Doctor, and Patient Recruiter Convicted in $4.3 Million Kickback Scheme against TRICARE
On January 12, 2018, Larry Howard, the owner of Fertility Pharmacy; Nicole Bramwell, M.D.; and Raymond Stone, a patient recruiter were convicted of conspiracy to pay health care kickbacks and paying and receiving kickbacks. Howard was also convicted of money laundering. Howard, Bramwell, and Stone were involved in a kickback scheme that resulted in $4.3 million in false and fraudulent claims to TRICARE for pain and scar creams. Specifically, Howard paid illegal health care kickbacks to Stone, who in return referred patients to doctors selected by Howard. The doctors then prescribed expensive pain and scar creams to the patients, which Howard then billed to TRICARE. Howard also paid illegal health care kickbacks to Dr. Bramwell in return for her writing prescriptions for the expensive creams. The creams could cost up to $17,000 per bottle. From October 2014 through May 2015, TRICARE paid Fertility Pharmacy over $4.3 million for prescriptions procured through illegal kickbacks. This was a joint investigation with the Federal Bureau of Investigation.
ANNOUNCED PROJECTS (to view announcement letter, if available, please click on the title)
Audit of the United States Strategic Command Facility Construction Project
The objective of this audit is to determine whether the DoD effectively managed the United States Strategic Command Headquarters Facility Construction Project. Specifically, we will review the requirements development, the design-bid-build contract award processes, design suitability, contractor performance, and oversight of contractors for this project.
Audit of the Department of Defense Civilian Pay Budgeting Process
The objective of this audit is to determine whether the Office of the Under Secretary of Defense (Comptroller)’s management and oversight of the Military Services’ Civilian Pay Budget Processes ensure that the Services capture the true cost of their civilian workforce. This is the last in a series of reports on the civilian pay budget process in the Military services.
Follow up Audit of the Military Departments’ Security Safeguards Over Secret Internet Protocol Router Network Access Points
The objective of this audit is to determine whether the Army, Navy, and Air Force implemented actions to correct problems identified in prior DoD OIG reports related to the improvement of logical and physical security controls that protect Secret Internet Protocol Router Network access points.
External Peer Review of the Defense Commissary Agency Office of Internal Audit
The objective of this evaluation is to determine whether the Defense Commissary Agency Office of Internal Audit’s system of quality control was suitably designed, and whether the audit organization complied with its quality control system and applicable professional audit standards.